9. A man borrows Php10,000 from a loan firm. The rate of simple interest is 15%, but the interest isto be deducted from the loan at the time the money is borrowed. At the end of one year he has topay back Php10,000. What is the actual rate of interest?

Par value of borrowing = Php 10,000 Interest rate = 15% Net Borrowing = Par value*(1-Interest rate)…

Answered: 9. A man borrows Php10,000 from a loan…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 14P

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9. A man borrows Php10,000 from a loan firm. The rate of simple interest is 15%, but the interest is to be deducted from the loan at the time the money is borrowed. At the end of one year he has to pay back Php10,000. What is the actual rate of interest?